Natural gas is found in coal seams hundreds of metres beneath the earth's surface.

Just like conventional natural gas, coal seam gas (CSG) is comprised mostly of methane (CH4) and is a type of petroleum that was formed from the compressed remains of plants over millions of years.

Natural gas from coal seams forms part of the gas supply piped into more than one million homes and businesses in NSW for use in everyday cooking, heating and manufacturing. In fact over 30% of the eastern Australian gas network is fed by coal seam gas.

CSG is used to generate electricity in gas-fired power stations as a low emission alternative to electricity produced from coal.

In Australia, the major CSG resources are found in Queensland's Bowen and Surat Basins, in NSW in the Gunnedah, Gloucester and Sydney basins, and on the NSW-Queensland border in the Clarence-Moreton Basin.

CSG is becoming increasingly important in the nation's energy market as Australia moves to a lower carbon economy.

Natural gas from coal seams has been safely produced in Australia since commercial production began in central Queensland in 1996. In NSW, the Camden Gas Project has been producing gas in south-western Sydney since 2001.

Australian producers have become international leaders in world-best practice technologies and production and the NSW Government has introduced some of the toughest regulations in the world to safeguard the health of communities and protect the State's valuable land and water resources.